Concordium, the blockchain company developing an enterprise solution for private on-chain transactions, has been invited to join the FinTech Association of Japan (FAJ). The introduction is a coup for Concordium, which will become a corporate member of an organization with ties to PayPal, Visa, JP Morgan, and KPMG and the first blockchain company to gain admittance.
While Concordium has yet to launch the mainnet of its business-friendly blockchain, its testnet is underway and the project is set for a full launch in Q2 of 2021. In the interim, its membership of FAJ will allow Concordium to develop ties with Japanese fintech regulators, and identify the optimum way to drive adoption of its regulatory-compliant chain.
Baking Compliance Into Crypto
Many of Concordium’s goals align with those of the FinTech Association of Japan, which serves as a non-profit committed to creating an environment for emerging technology-based financial services. This is essentially what Concordium is doing on-chain, by making it possible for businesses to transact privately despite using a public chain. At the same time, transactional data can be disclosed to financial regulators for compliance purposes, but is otherwise encrypted, preventing third parties including competitors from viewing it.
In a blog post by the FAJ announcing the news, Concordium explained:
"Joining the FinTech Association is part of Concordium’s strategy to align with Japanese regulations, address issues in the FinTech space, and contribute as a platformer."
The Cream of Cryptographers
While Concordium’s tech will ultimately determine whether its blockchain sees wide-scale enterprise adoption, it is its team that has gotten tongues talking, and led to achievements such as FAJ membership. Several of the world’s best cryptographers, mathematicians and financial executives are on its books, either as core team members or in an advisory capacity. This includes Professor Ivan Damgård, co-inventor of the Merkle-Damgård-construction, a cryptographic hash function that most blockchains utilize. Its Chief Technology Officer Torben Pryds Pedersen, meanwhile, was previously head of Cryptomathic’s R&D division.
The Concordium team is currently refining its testnet, as preparations ramp up for a full network launch in 2021. Zero-knowledge proofs are used to provide "perfect privacy" in which transactions can only be viewed by sender and recipient – and by relevant financial regulators if required by law. Concordium’s blockchain is designed to support B2B payments as well as digital IDs, allowing users to maintain ownership of their personal date. This frees enterprises from the burden of safeguarding user data, while still being able to access it on an opt-in basis.
Commenting on the company’s admission into the FinTech Association of Japan, Concordium CEO Lone Fønss Schrøder said:
"It’s a privilege to have Concordium join the global leaders contributing to the FAJ efforts. We look forward to advancing ideas for improving the fintech space, through pioneering compliant systems that capitalize on blockchain’s unique properties."
The deal should bolster Concordium’s prospects of striking deals with Japanese fintechs looking to build upon its blockchain framework. The ability to utilize blockchain for B2B transactions, while achieving regulatory compliance, is critical for enterprises, enabling them to fulfill their reporting obligations, while maintaining user privacy.